AM Online

Warranties 10x more likely to attract customers than service plans

Manufacturer warranties are 10 times more likely to encourage new car buyers back to the franchised workshop than service plans, according to Castrol Professional and Trend Tracker.

When asked why they had chosen a franchised dealership for servicing work, 68.5% of interviewees with cars currently covered by a manufacturer warranty highlighted the warranty as the primary reason. 12.3% claimed franchised workshops’ expertise and competence were the main reason, while only 6.3% named service plans as the main reason for returning to the franchised workshop.

The data, presented recently at a private dealer conference in London and due to be published in the 2015 Castrol Professional-sponsored report later this year, relates to the full year of 2014 and was the result of face-to-face interviews with over 17,500 British car owners.

Trend Tracker analyst Chris Oakham said: “This latest research suggests that franchised workshops are in an increasingly strong position as new car sales have recovered and continue to rise. With the increased number of newer cars on UK roads, franchised workshops can reasonably expect to attract a great deal of highly-profitable servicing and maintenance work for those cars still under warranty.

“While new car buyers are no longer legally tied to a franchised dealership for the sake of the manufacturer’s warranty, the data highlights the undeniable benefit of a strong manufacturer warranty as a key driver behind aftersales retention. Service plans are important, but these findings highlight the importance that buyers place on manufacturer-backed servicing.”

The data suggests, however, that dealers are vulnerable once the manufacturer warranty expires on their customers’ cars. The research also suggests that the average age of cars entering franchised workshops for servicing and maintenance work is 4.3 years – just 0.3 years higher than in 1996.

Head of marketing at Castrol UK and Ireland, Nigel Head, said: “While franchised workshops are able to rely on warranties to drive aftersales retention in the first few years of a car’s life, once a car leaves the shelter of manufacturer-backed cover history tells us that dealers are left exposed to a potential exodus in aftersales custom. Dealers that develop a robust servicing and communications strategy targeted at buyers and owners of older vehicles could boost highly-profitable aftersales custom after a car’s warranty has expired.

“Many dealers already have the tools at their disposal to further improve customer retention – these days, aftersales programmes are tailored for budgets of all shapes and sizes, and cars of all ages. The key lies in consistent and targeted communications, engaging customers with the full service offer, such as the promise of high quality parts, extended opening hours, service while you wait, courtesy cars and any other value added elements offered by the workshop.

“Experience and expertise is also a major selling-point for customers. Manufacturer-trained technicians, diagnostic updates, and manufacturer-recommended equipment are all useful in providing a clear value offer that will encourage many to consider the franchised dealer for their ongoing car service and maintenance needs.”

Click here for aftersales best practice and procurement insight

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Login to comment


No comments have been made yet.